Hotel ÜJA CEO on Buying and Digitizing Boomer Hotels
We're very happy, and also we increased ADR from last year to this year by 30%. So we were able to establish a higher price line while also increasing occupancy from last year.
Speaker 2:From Hotel Tech Report, it's Hotel Tech Insider, a show about the future of hotels and the technology that powers them. Today on the show, we have Simona Eicher, the CEO and owner of Hotel Oia in Switzerland. She and her partner came in, turned around the business, increased RevPAR and occupancy, achieved staggering EBITDA margins extremely quickly, and they did so with very little hotel background. We talk about the pros and cons of all different types of hotel technology, the things that made Simona switch solutions, the things that she loved about certain vendors, and so we're really excited to bring this to you today. Simona, thanks so much for coming on the show today.
Speaker 2:It's great to have you.
Speaker 1:Thank you for having me.
Speaker 2:I know that this conversation started around a LinkedIn post about some of the tech stack changes that you've made at your property. For our audience, I think what the coolest thing about you is that you came into this industry cold and had tech procurement skills and background and you had McKinsey background and then you jumped into hotels and we're looking at it from a different lens, which is awesome. Can you talk a little bit about where you were before you jumped into hotels? How did that decision come about that you were like, hey, I'm gonna go buy a hotel now?
Speaker 1:So I studied economics. Then I did the classic career track of economics students, was, I mean, I did some internships at banks and software development actually. But business side, the tech piece, the business piece, which is interesting that it used to be separate. So this was roughly fifteen to twenty years ago. And then I did five years at McKinsey.
Speaker 1:And I was more and more specializing and going into tech. And actually my tech experience mainly comes from there. I help clients find the right software and develop software. And really making the decision between buy and build and helping them get started with digitization and automation of processes. And I worked across industry, not hospitality, but all consumer facing.
Speaker 1:So banking, yes, it's banking that you sell a digital product. It was always retail banking. And I did consumer products, consumer goods, I did retail. And then I did roughly two years, a venture builder after that. Because I loved the hands on process of building a company.
Speaker 1:And I was fascinated by the whole angel investment. I thought I'd be an angel investor eventually. But luckily, I saw into the reality of startups at that venture builder. And I really decided the only person I'm gonna invest in is myself and my own business. Well, it's the world of startups.
Speaker 1:I loved it. It was great. It was a great two years. But eventually the fund didn't really have a lot of money left to invest into new businesses. So my job finding new business opportunities and developing and getting them running kind of stopped existing to be honest.
Speaker 1:So I had to find something else. And at the same time in my private life, me and my partner decided that we wanted to move to the mountains in Switzerland. We are Swiss, but we lived in Zurich. And we just said, we want our lives to evolve around nature And we got a dog. So and as that shifted, we just decided to move to Skol.
Speaker 1:That's a town in the Engadine. Some people know St. Moritz and Engadine, we're just the lower part, like an hour from St. Moritz. But it's like the less posh twin.
Speaker 1:We have the ski resort and it's amazing for hiking and biking. And we have the river, the river inn, where you can even do water sports and things like that, so rafting.
Speaker 2:Did you guys choose the town before the hotel or was the town around the hotel investment opportunity?
Speaker 1:We just chose the town and we waited for two years until we were ready to move because we had there was a new build getting ready for us to move in. And then actually, we were supposed to move just after Christmas. And before Christmas twenty twenty four, we found a hotel. We just found it on Homegate which is a platform where they put real estate.
Speaker 2:Very cool. Okay, so you find this hotel and what were your biggest apprehensions about buying a hotel?
Speaker 1:My biggest apprehension, like I would never have thought that I was able to afford a hotel, that I'd be able to do that. But the price was pretty much the price of like a two bedroom. Because, well, is how it is with boomer businesses, right? I mean, boomers are leaving, they want to retire. The former owner wanted to retire.
Speaker 1:He hadn't been going along with digitization and hadn't been doing proper digital marketing. And so the business was declining and no one wanted to buy it anymore. And as it is with hotels, hotels aren't really worth the same that a house is, right? Even though it is a house technically, but it is worth as much as the business is generating. And so the price was amazing surprisingly.
Speaker 1:You had to see some of the potential. We had to do a little remodeling, but actually the quality and the upkeep was done really well. It was still in great shape and he was operating it still. So he wasn't like in ruins. It was still amazing.
Speaker 1:And when we saw it, I just knew I could turn it into something.
Speaker 2:How many rooms is the hotel?
Speaker 1:So right now we have 11 rooms and an apartment. I have plans to turn it into 14 rooms. Plus maybe if I get a permit 17 or something. But then we're full. But I have a vision.
Speaker 2:Very cool. It's really interesting to hear that boomer story of great asset, great location, summer activities, winter activities, but the technology and digital side isn't there and the business is declining and that's creating these opportunities for people in the next generation to come in and create their own wealth and buy something at a low price and invest in really creating a business and use those skills that the last generation in some cases may be leaving behind.
Speaker 1:Just in this town, in the next few years, a couple of hotels, three or four will actually go on the market. But they don't believe that they have buyers because their kids don't want it because they saw them work fourteen hour days. And they think the only way to operate a hotel is a fourteen hour day. But I'm telling you, it's that we are not. We don't have fourteen hour days.
Speaker 1:We have seven days a week during the season, which is another story. But if you choose your concept deliberately and use technology, you can make a lot work with a lot less FaceTime. Even though people love FaceTime, we're still learning that like to be a proper host. That's what AI cannot replace. Being a human, having a connection, personal recommendations.
Speaker 1:But it's not for a fourteen hour day that I can tell. And if you're setting it up to be more modern, more tech, less unnecessary operations, hotels can be a very profitable business, even small ones.
Speaker 2:Totally. So when you came into the business, what did the tech stack look like? What were your perceptions about technology and hotels like coming from the outside?
Speaker 1:Well, coming from the outside, I mean, the former owner, didn't have a lot of tech. He just had a local booking engine, would say, and email. Like lots of his bookings were done via phone, via email. People didn't really buy on his site because it was very easy to buy there. His website really didn't look nice.
Speaker 1:And he didn't do a good job in digital marketing. So a lot came in from booking as well in OTA, right? If you don't have a good booking funnel yourself, you're more dependent on OTA. But for me coming in to be honest, I thought the selection of software and the capabilities is amazing. Because we all have the same problem.
Speaker 1:It's not that complex of a problem. And if you compare it to other industries, like I did something in health. And it needed to be super specific to the customer journey and to each test you could take and it was preventative health. So we had to build. I helped a lot of customers design like buy or build, what do you want to do yourself?
Speaker 1:And here, of course, we didn't have the money to build. With 11 rooms you don't want to build, but you don't have to, in my opinion. There's so many great solutions because we all have the same kind of problems. The customer wants to make a booking, then you want to contact the customer and inform them. You want to guide them through the journey, maybe want to do some upsell, you need to do the check-in, you need to maybe provide a digital key or a physical one.
Speaker 1:And then they check out, You want to provide them with some information of what to do in the destination. It's the same for everyone. And to be honest, I had a little bit of experience before. It sounds like I've not done anything, but we own a holiday apartment.
Speaker 2:You kind of had a short term rental experience before the it's a bit similar Yes.
Speaker 1:Did some sort of I was like, well, short term wasn't that hard. We just multiply it by 11 and
Speaker 2:Just 11 times as hard. So they had a local like Swiss booking engine it sounds like and some 1990s vibes website with like a horrible funnel and maybe some basic email system. So what did you bring in first and how did you go about that process?
Speaker 1:I learned about property management system, software or system, PMS. So I learned that these things exist and they can actually do a lot. I was pretty amazed. I mean, before I used guest tea for my holiday apartment and it was okay. But then when I went into what do hotels really use, it was clear to me that I wanted a big one.
Speaker 1:I wanted a system that was integrated because that's what I also learned about in software development. Yes, you can have a best in class, best in class, best in class. But if they need to communicate with each other, often we had to build something so that the best in class would properly communicate. So I wanted to have one big software that already did a lot. And of course, all the key steps of the customer journey that I just talked about.
Speaker 1:Booking the guest communication to check-in, like one source of truth, optimally data management all in one tool. And so I knew I needed a PMS. And at first we landed on Cloudbeds for year one.
Speaker 2:And how did that go from launch, onboarding, getting this property live with Cloudbeds? How was that experience for you?
Speaker 1:It was a bit harder than I thought. It was a bit more manual effort than I thought I have to admit. Because you have to set up all the rooms and the categories and figure out the communication. So if you do everything from zero, it did in the end. It does take two months in the end.
Speaker 1:Even though it sounds like a lot, two months, what are you doing for two months? And yes, the work itself isn't, but then you test and iterate and you see it. And also we have digital logs, which I like it's cloud based. We have SaltoKS. I like the hardware.
Speaker 1:We were told it's most reliable from just the hardware installer. And we are very happy with it. But I also didn't realize that not all softwares integrate with that. So sometimes you make decisions on limited information and then you're faced with reality.
Speaker 2:So that was the limitation for you with CloudViz was that it doesn't integrate with Salto KS, which is the hardware you have. So you basically had either upgrade the hardware or switch to a different system. Is that kind of what went down?
Speaker 1:No, we got a new hardware. That means Salto KS was the new hardware that we installed and we had to find a system that would integrate with it, which Cloudbeds did. But I mean, if we talk about why we then switched after a year, we ran into a couple of issues. The biggest one that really made us switch was that the digital logs weren't fully reliable. And just overall how it seemed, how they managed.
Speaker 1:I mean, is my perception, my personal experience, right, using the software. Just what happened was that sometimes the keys in the middle of the night, they would stop working. Or like a setting that I had made wasn't there anymore. So I tested everything and then it broke. And of course, you don't find out that something's broken until a guest complains.
Speaker 1:And every hotel owner probably feels the same. Like what you don't want is guests complaining. Like you're not knowing about a tech issue until a guest complains. That just is such a pain point that we couldn't ignore it. Let's say that especially the difficulties because if someone calls you at 1AM because they can't get in the room anymore.
Speaker 1:I mean, for me that was a really bad experience just personally they call you on your private phone and they can't get in 1AM. And so it just felt like what they were doing from my software development knowledge that I have that they were fixing bugs, but weren't doing proper testing. And then other things broke in another place and no one knew and they never communicated about it. So there was really struggling with that. That was what gave us the push to start looking for something else.
Speaker 1:And also, to be honest, Muse did really good marketing. I'm a sucker for it. They really said that they use AI. And it did feel like when I use Cloudbeds that their whole tech backbone, however it was set up, that it has some issues there. It's a bit older.
Speaker 1:Like the analytics weren't working in a way that I wanted. Like I couldn't do a proper dashboard. It was very manual. I had to download Excel, upload Excel. It couldn't show anything.
Speaker 1:The chart, like after thirty days broke. After thirty days didn't show anything anymore.
Speaker 2:Like no data.
Speaker 1:Yeah, no data. As soon as the time I selected was more than a month, no data. Look, it can be a user problem. I'm not saying that I did everything right. And I have to say CloudBets, it's an American software.
Speaker 1:And I think that you notice it. You notice it in the way that like multi language is not wasn't thought of from day one. And you notice that. And the other thing is legal and regulation and local systems. It doesn't integrate with that stuff.
Speaker 1:Like now news integrates with our local bookkeeping software that of course is national because every country has different regulations about bookkeeping. And now we just can integrate there. Then we have this, it's called HESTA, where we need to report our guests data. How many guests stay with us? If they come and go, which nationalities?
Speaker 1:And also that didn't integrate with that. And I didn't even know that there were systems that could do that. But I have to say Muse can do that.
Speaker 2:And are there things like when you made the switch, were there things that you were worried about leaving behind with Cloudbeds in terms of like the infrastructure? I know they've got meta search bidding, they've got guest experience, they've got rate management, they've got a bunch of these other modules. Were there things that you were worried about leaving behind when you switch to a new system?
Speaker 1:I wasn't worried about losing things because you never know what you're going to get with the new software. That's the problem when you choose a software. And to be honest, you don't even know what it can do and how it really feels until you use it. Because they'll say, like I would ask, do you integrate with Google Ads or like where Google also shows? It doesn't have to be paid ads.
Speaker 1:Just in Google, you can show the price, And connect to the direct site. So Muse doesn't do it, but we use SiteMinder and they said yes. But turns out, the only way that SiteMinder does it is you can even choose if you want to run ads or not. And so sometimes when someone clicks the ad link, I just pay a 15% commission. And there's no other way of just integrating my site into Google without paying for it.
Speaker 1:So that's for example a big loss. But I didn't even know that that could happen. I think it's hard to know what you'll lose. Another thing is around flexibility of sending messages. Their Cloudbeds, Whistle does a great job.
Speaker 1:Also the digital keys and how it's set up that we send the digital keys. And it was much more flexible before. So that I miss. I do miss that stuff.
Speaker 2:And as you went into the buying process the second time, and it's within a relatively short timeframe of a year, how did your buying process look different in round two versus round one?
Speaker 1:I mean, in round two, I really looked at roughly five softwares, while in round one, I just went for one. So I really knew what I wanted and I evaluated pros and cons of more local softwares, smaller softwares, bigger ones, some that were more targeted at small hotels. So I was a lot more informed. And I knew my like killer criteria, like integrating with South Korea, example. I didn't even know when I got the hardware, as I said, that might be a killer criteria.
Speaker 1:But apparently it is. Sometimes you don't know what you don't know.
Speaker 2:So when you guys purchased the hotel to now, do you have any high level results in terms of occupancy growth, rate growth, anything like that relative to the comps in the area by implementing digital tools like that?
Speaker 1:Yeah, I mean, we do have the data, of course. I'm a former McKinsey consultant. So all I do all day long is analysis. I probably do way too much analysis, to be honest. But I mean, one thing that you have to know, we're a seasonal hotel.
Speaker 1:So we're closed roughly at least two, if not three months, depending on the holidays and how they fall. Because we close at Easter, we open again roughly for Ascension. If Ascension is too early, we do it a bit later. But it's basically closed April and part of May. And we're closed November and part of December.
Speaker 1:And so you kind of look at occupancy throughout the year, but then also occupancy while you're open, which are two different things. But I just know overall in Switzerland roughly occupancy while during the year is in the 50s and we are in the high 50s. So that's already great. And while we're open this year now, we're already in the high 60s. So we're very happy.
Speaker 1:And also we increased ADR from last year to this year by 30%. So we were able to establish a higher price line while also increasing occupancy from last year. But it's not even a full year. We opened mid July after renovating for roughly four months. So we only have so far one full month of comparison before and after.
Speaker 1:Because we also we have really short term bookings. Lots of them are last minute and lots of them are on average two nights. But here we're really in line with, I'm not sure if it's a global trend, but at least a local trend. People are booking more short notice, looking at the weather and they're staying two nights. Because maybe they're just doing longer weekends or they're doing two nights, two nights, two nights.
Speaker 1:We also mainly just have Swiss guests. More than 90% are Swiss.
Speaker 2:And as you look at that 30% growth in ADR, 10% or net net plus 10% of occupancy, And you kind of think about attributing that. Like what do you attribute that to mostly? Is it that making it easier to book online, getting on the local destination marketing organization side? Where do you think that net growth is coming from for your property? Is it the renovation?
Speaker 1:So just one thing that we get from the Easy Booking online is our direct booking. We have more than 80% direct booking from our site or via phone or email. So less than 20% comes from other channels, mainly booking or the tourist site. So I think that is a great achievement. It's very high compared to benchmark, at least what I see online.
Speaker 2:Yeah, your property size especially, that's really, really high.
Speaker 1:Yeah, so we're very very happy about that. And I think that's all about how easy it is to book. And that Swiss customers are educated. Our prices on booking are significantly higher, which we're legally allowed to do. So people know about that.
Speaker 1:They find us on booking and then they book directly. But they only do that because it's very easy. Otherwise, wouldn't do it. So we're very happy about that. But the reason why we've been able to really increase ADR was the renovation, of course.
Speaker 1:But then we invested heavily in marketing and branding and not in terms of paid marketing. I haven't spent a lot on that at all. But really like a nice design. I had a designer and who did our brand. Here in the area, it's relatively easy to compete in that sense.
Speaker 1:I mean, don't want they are in their 60s. The owners are in their 60s. They don't know how to do that even though it's really easy nowadays to have a nice website. So they've done a great job. They've run hotels for thirty years.
Speaker 1:I don't want to say, I don't know where I'll be in thirty years, to be honest. So I really respect what they've done. But in terms of digitization, they're just not that far ahead. There's one big group that owns three hotels at this point. And of course, they have a lot more resources and they do a pretty good job.
Speaker 1:But besides that, in the area, it's very easy to stand out if you do good digital marketing. And with that, I mean, like all the levers like just having a professional photographer take your photos. That's already a winning strategy here because not everyone does it, right? I mean, it's easy to compete of like having like just having a brand. Literally people they just have their name.
Speaker 1:They don't have a brand icon, brand colors, brand font. They don't have that. So if you have, like if you're young ish and know how to like the new tools, of course AI, but also Squarespace for our site. We use Canva. I do all the designing myself at this point.
Speaker 1:I had a designer to set up my brand. But ever since that, the guidelines are set and I just do everything on Canva. It's pretty cheap. And then I run my own social media. We've been able to grow pretty quickly.
Speaker 1:We have 8,000 followers, which again for our small hotel one year in, it's not too bad. And I do it all myself. I don't have a social media manager. Also, I just used Peak for the first time, peak.ai to check where we rank in terms of AI discoverability. And we're already battling around number two in the area.
Speaker 1:I mean, the one, the big company that I just mentioned with the three hotels, of course, they have lots of website, lots of content about them. So they're number one. But we're just behind them. And even they're like within one year. And it's not because we're that amazing.
Speaker 1:I do all the standard stuff, right? You have the landing pages that you set up and you set up your Google and you try to rank and do some SEO. So it's not magic what I'm doing. I just have the adventures of the area not being very digitized.
Speaker 2:So now that you've got good traction on the marketing side, you've got your rate management in place, your guest experience is mostly dialed with a few still like hiccups on the digital key. Are there other areas that you're looking at actively right now to drive growth in this next phase of the business? Or is it really like, hey, we've got our formula down, we're just going to keep chipping away at this and build and build and build?
Speaker 1:One big thing is that we're seasonal. So in February, you could sell your rooms 10x. You still want to be careful about not making it too pricey because you want repeat guests and you want high guest satisfaction. So even, you know, I'm an economist and there's demand and supply and it matches. So if demand triples and supply stays constant, then your price should triple.
Speaker 1:But I don't think it's smart to do if you wanna tie the customers to your long term. And they come in winter, maybe they also come in summer. Here we have really, as I said, it's a repeat area. So you wanna keep your guests close. I mean, we're open one year and we've had people who've been here five times in one year.
Speaker 1:Just because they love the area and it's close to their home and it's like a little weekend escape and they love coming back. So there you just need to be careful. And my point was go back. The main thing about seasonality is that there's low season. And during low season, it's a real pain to fill it.
Speaker 1:We're closed for almost three months in the year because there's basically no demand. And everything else is closed, which for again, for small hotel like us that isn't a full service facility is a big issue. If the restaurants are closed and the cable cars are closed and the thermal baths are closed, what do you do? So we don't really have a choice even if we could generate our own demand. But that is one thing for the early season, which for us is late May and early June, even late March.
Speaker 1:We want to, especially during the week create more demand. That's where there's the biggest potential for us at this point from after this first year of like a lot of growth, a lot of awareness. We're doing all the weekends and high season, we're pretty much fully booked. There's nothing left. As I said, while we're open, our occupancy is in the high 60s.
Speaker 1:But in February, was 95%, which everyone knows that's where the bottleneck, anything above that is impossible basically operationally. So in July, it was 85% and in June 84. So that means we have a March where it's 40. We have a June where it's 40. So there we have the biggest potential.
Speaker 1:And what we really want to do is attract small businesses for retreats. Because we have a great retreat room, like just one really nice presentation room. And with only 11 rooms, you can book the hotel exclusively very quickly. We're not really charging people extra. We just say as long as you book every single room, you can have the hotel for yourself.
Speaker 1:Because that would also be the condition for anyone else booking. So I think that's a great upside and that's the one thing we really want to focus on, like pushing this during the week low season occupancy optimally with retreats. Because you can generate tourism when it just isn't there.
Speaker 2:Well, think we covered a lot of ground here and I'd love to have you back at some point like in a year and just talk about the things that you added. Are there any other technology initiatives that are imminent now? And I guess, are you using AI in the business? Are you using Cloud Code or anything like that to solve problems on the edge cases of the software that you're using?
Speaker 1:I definitely am using, for example, Cloud to generate dashboards. I've seen at least the last time I tested with ChatGPT wasn't that great. Cloud does a great job generating dashboards. And actually I just filled in a survey from Muse like how I would like to use AI. And I would love for Muse to just have an open interface to one pull like the customer data.
Speaker 1:It can be like anonymized. I don't want to put names and private customer data in there. I just want like who's coming and how long are they staying. So to do some advanced analysis and fill my dashboard right now, I'm just like getting the report in Muse and pulling it over there. So that I would love to have.
Speaker 2:I really appreciate you making the time. Really cool to watch your journey and stoked to share this with our audience and would love to have you back at the next phase, maybe next year.
Speaker 1:Sounds amazing. It was lovely having this chat. I hope the audience enjoyed it. Hope.
Speaker 2:Thank you, Simona. That's all for today's episode. Thanks for listening to Hotel Tech Insider produced by hoteltechreport.com. Our goal with this podcast is to show you how the best in the business are leveraging technology to grow their properties and outperform the concept by using innovative digital tools and strategies. I encourage all of our listeners to go try at least one of these strategies or tools that you learned from today's episode.
Speaker 2:Successful digital transformation is all about consistent small experiments over a long period of time, so don't wait until tomorrow to try something new. Do you know a hotelier who would be great to feature on this show, or do you think that your story would bring a lot of value to our audience? Reach out to me directly on LinkedIn by searching for Jordan Hollander. For more episodes like this, follow Hotel Tech Insider on all major streaming platforms like Spotify and Apple Music.
